oshkosh corp 3-5-15 jpm presentation final · j.p. morgan transportation, aviation &...

MOVING THE WORLD AT WORK

Oshkosh Corporation (NYSE:OSK)

J.P. Morgan Aviation, Transportation & Industrials ConferenceMarch 5, 2015


Forward-Looking StatementsThis presentation contains statements that the Company believes to be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, including, without limitation, statements regarding the Company’s future financial position, business strategy, targets, projected sales, costs, earnings, capital expenditures, debt levels and cash flows, and plans and objectives of management for future operations, are forward-looking statements. When used in this presentation, words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “should,” “project” or “plan” or the negative thereof or variations thereon or similar terminology are generally intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, assumptions and other factors, some of which are beyond the Company’s control, which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors include the cyclical nature of the Company’s access equipment, commercial and fire & emergencymarkets, which are particularly impacted by the strength of U.S. and European economies; the strength of emerging market growth and projected adoption rates of work at height machinery; the expected level and timing of DoD and international defense customerprocurement of products and services and funding thereof; risks related to reductions in government expenditures in light of U.S. defense budget pressures, sequestration and an uncertain DoD tactical wheeled vehicle strategy, including the Company’s ability to successfully manage the cost reductions required as a result of lower customer orders in the defense segment; the Company’s ability to win a U.S. JLTV production contract award and international defense contract awards; the Company’s ability to increase prices to raise margins or offset higher input costs; increasing commodity and other raw material costs, particularly in a sustained economic recovery; risks related to facilities expansion, consolidation and alignment, including the amounts of related costs and charges and that anticipated cost savings may not be achieved; global economic uncertainty, which could lead to additional impairment charges related to many of the Company’sintangible assets and/or a slower recovery in the Company’s cyclical businesses than Company or equity market expectations; risks related to the collectability of receivables, particularly for those businesses with exposure to construction markets; the cost of any warranty campaigns related to the Company’s products; risks related to production or shipment delays arising from quality or production issues; risks associated with international operations and sales, including foreign currency fluctuations and compliance with the Foreign Corrupt Practices Act; the Company’s ability to comply with complex laws and regulations applicable to U.S. government contractors; the impact of severe weather or natural disasters that may affect the Company, its suppliers or its customers; cyber security risks and costs of defending against, mitigating and responding to a data security breach; and risks related to the Company’s ability to successfully execute on its strategic road map and meet its long-term financial goals. Additional information concerning these and other factors is contained in the Company’s filings with the Securities and Exchange Commission, including the Form 8-K filed January 27, 2015. All forward-looking statements speak only as of the date of this presentation. The Company assumes no obligation, and disclaims any obligation, to update information contained in this presentation. Investors should be aware that the Company may not update such information until theCompany’s next quarterly earnings conference call, if at all.

2March 5, 2015J.P. Morgan Transportation, Aviation & Industrials Conference


Oshkosh Corporation

Leading provider of specialty vehicles– Moving the World at Work

Nearly 100 years in business; incorporated in 1917

Serial innovator of game changing new products

Market Capitalization(1): $3.8 billion

FY14 Revenue: $6.8 billion

Focused on delivering value to customers and shareholders

3

(1) As of February 27, 2015

Access Equipment Defense Fire & Emergency Commercial

March 5, 2015J.P. Morgan Transportation, Aviation & Industrials Conference


Confidence in FY15– Expect to nearly double EPS from FY12 to FY15– Strong customer sentiment

Positive Outlook Beyond FY15– Expect non-defense markets to sustain slow recovery– Significant upside opportunities in defense– MOVE to deliver margin expansion and growth

4

A Positive Outlook for OSK



Basis for Positive Outlook



FY15 MOVE ScorecardOn Track to Achieve FY15 Adjusted EPS Target Range

6

FY15 TargetInitiative

EPS Double EPS by FY15 (1) EPS of $4.00 - $4.50

…Bottom Line Results for Shareholders

FY15 Estimate

$4.00 - $4.25*

(1) Compared with FY12 expectations as of September 2012 Analyst Day.(2) Net of investment costs and compared with consolidated FY11 operating income margins.

* Non-GAAP results. See Appendix for reconciliation to GAAP results.



Solid Start to FY15 Q1 adjusted EPS* of $0.41 Solid execution and timing of

MOVE related spend drove higher than expected results

Strong orders and backlogs for all non-defense segments

Repurchased 1.9 million shares for $88.1 million– In addition to 8.3 million shares

repurchased during FY14

Maintaining FY15 adjusted EPS* estimate range of $4.00 to $4.25 despite negative FX impact expected in Q2-Q4

Net Sales(billions)

Adjusted EPS*

7

$1.4 $1.5

$0.41

$0.63

$0.00

$0.25

$0.50

$0.75

$0.0

$0.2

$0.4

$0.6

$0.8

$1.0

$1.2

$1.4

$1.6

$1.8

FY15 FY14Net Sales Adjusted EPS*


OSK Fiscal Q1 Performance



Access Equipment –The Market Leader

MOVE delivered in FY14– Exciting new products– Strong incremental margins– Record revenues, operating

income and operating income margin

Continued growth expected in FY15– Moderate growth in North America– Mixed outlook in other regions Strong new product launches

during the year

8

Reaching Out – Rising to Every Challenge



Slow U.S. Construction Recovery is Continuing

9

Source: U.S. Census Bureau, February 18, 2015Source: U.S. Census Bureau, February 2, 2015

U.S. Housing Starts - Current Annual Forecasts (millions)

Date 2014 2015 2016Global Insight Feb-15 1.00 1.18 1.33Moody's - Slower Recovery Feb-15 1.00 1.09 1.48Portland Cement Association Nov-14 0.99 1.21 1.43Average Analyst Estimate 1.00 1.16 1.41

U.S. Nonresidential Construction - Current Analyst EstimatesDate 2014 2015 2016

Portland Cement Association Nov-14 7.3% 9.0% 7.5%FMI Source Feb-15 6.0% 6.0% 6.0%Global Insight Dec-14 3.7% 1.5% 4.3%Moody's – Slower Recovery Feb-15 6.9% 7.8% 5.1%Reed Dec-14 3.9% 8.4%McGraw-Hill Dec-14 13.5% 7.6%Average Analyst Estimate 6.9% 6.7% 5.7%

400500600700800900

1,0001,1001,200

450,000

500,000

550,000

600,000

650,000

Thousands $ Billions U.S. Non-Residential SpendingHousing Starts



Operating Income Margin Expansion Remains a Priority

Expect biggest impact years of optimize cost and value innovation initiatives yet to come

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10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

FY14 FY15E Target

(Ope

ratin

g In

com

e M

argi

n %

)

16%

17%

~ 15% 14.3%

ACCESS EQUIPMENT



Defense –Reduced Cost Structure with Upside Opportunities

Implemented necessary operations changes to match lower demand

Submitted proposal for JLTV program award in February– Expect decision on winning bidder

late Summer 2015 Canada MSVS program award

decision expected by June 2015

Continuing pursuit of sales of thousands of M-ATVs– International– Reset opportunities in U.S.

Generally favorable FY16 budget funding requests for our programs

11

Mission Proven – World-Class Performance



Fire & Emergency –Operational Improvements Leading to Bright Future

Continuing to execute operational efficiency roadmap− Q1 results better than expected

New products positively received– Enforcer and Saber chassis– Additional launches planned for

FDIC (April 2015)

Stable North American fire truck market – Modest market growth expected

in FY15 Additional international success− ARFF orders in Asia, Australia

and Latin America

12

Recently Launched Enforcer and Saber Chassis Driving Customer Interest




Margin expansion behind schedule, but improvement roadmap is solid

Roadmap to target doesn’t require market recovery

13

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

FY14 FY15E Target

(Ope

ratin

g In

com

e M

argi

n %

)

10%+

~ 4.25% 3.5%

FIRE & EMERGENCY



Commercial –Progress Continues

Strong North American concrete mixer market recovery over last several years

− Driven by slowly improving housing market

− Strong attendance at World of Concrete in February

RCV market grew in FY14 after a down year in FY13

Split-bin and automated RCV models generating incremental demand

MOVE investments continue

14

Alternative-Fuel Vehicles Split Body Rear Loaders




Optimize cost initiatives continue Absorption benefits accelerate in market recovery

15

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

FY14 FY15E Target

(Ope

ratin

g In

com

e M

argi

n %

)

10%+

~ 6.5% 6.2%

COMMERCIAL



Driving to FY15 MOVE Targets and Beyond



What to Expect from Oshkosh in FY15?



What to Expect from Oshkosh in FY15?

Deliver MOVE strategy– FY15 adjusted EPS* estimate

range of $4.00 - $4.25– Margin improvement in all non-

defense segments– Launch game changing new

products– Compete vigorously for business

around the world

Target defense contract awards

Maintain strong customer focus

Increase industry leading quality to higher level

Drive shareholder value

18




Updated Expectations for FY15

Additional expectations Corporate expenses of $140 - $145 million Refinancing of 8.5% Sr. Notes Tax rate of ~31% CapEx of ~$150 million Free cash flow* ~$200 million Assumes share count of ~80 million

Segment information

Revenues of $6.5 billion to $6.6 billion Adjusted operating income* of $510 million to $540 million Adjusted EPS* of $4.00 to $4.25


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Q2 Commentary Expect adjusted EPS in range of Q2 FY14

adjusted EPS* Continued higher telehandler sales mix due to Tier 4 FHTV break in production until contract extension

is finalized

Measure Access Equipment Defense Fire &

Emergency Commercial

Sales(billions) $3.7 - $3.8 ~$1.0 ~$0.80 ~$1.0

Operating Income Margin ~15.0% Slightly above

break even ~4.25% ~6.5%



And Beyond FY15? Continued improvement

Execute effectively to deliver positive near-term outlook

Continue operating income margin expansion – Target 16 – 17% at Access Equipment– Initially target 10% at other segments

Prudent capital allocation– Target annual dividend increases– Begin building cash; deploy with

crocodile patience Sustain talent and process

improvement to outperform with Oshkosh Operating System

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7.0% 7.5% ~ 8.0%

10.0%+

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

2013 2014 2015E Target

Consolidated Adjusted Operating Income Margin *




For informationcontact:

Patrick N. DavidsonVice President, Investor Relations(920) [email protected]

21

Jeffrey D. WattDirector, Investor Relations(920) [email protected]



22

Appendix: Commonly Used AcronymsARFF Aircraft Rescue and Firefighting MECV Modernized Expanded Capability VehicleAWP Aerial Work Platform MRAP Mine Resistant Ambush ProtectedCapEx Capital Expenditures MSVS Medium Support Vehicle System (Canada)CNG Compressed Natural Gas NOL Net Operating LossDGE Diesel Gallon Equivalent NPD New Product DevelopmentDoD Department of Defense NRC National Rental CompanyEAME Europe, Africa & Middle East OH OverheadEMD Engineering & Manufacturing Development OI Operating IncomeEPS Diluted Earnings Per Share OOS Oshkosh Operating SystemFHTV Family of Heavy Tactical Vehicles OPEB Other Post-Employment BenefitsFMS Foreign Military Sales PLS Palletized Load SystemFMTV Family of Medium Tactical Vehicles PUC Pierce Ultimate ConfigurationGAAP U.S. Generally Accepted Accounting Principles R&D Research & DevelopmentHEMTT Heavy Expanded Mobility Tactical Truck RCV Refuse Collection VehicleHET Heavy Equipment Transporter RFP Request for ProposalHMMWV High Mobility Multi-Purpose Wheeled Vehicle ROW Rest of WorldIRC Independent Rental Company SMP Standard Military Pattern (Canadian MSVS)IT Information Technology TACOM Tank-automotive and Armaments CommandJLTV Joint Light Tactical Vehicle TDP Technical Data PackageJPO Joint Program Office TPV Tactical Protector VehicleJROC Joint Requirements Oversight Council TWV Tactical Wheeled VehicleJUONS Joint Urgent Operational Needs Statement UCA Undefinitized Contract ActionL-ATV Light Combat Tactical All-Terrain Vehicle UIK Underbody Improvement Kit (for M-ATV)LVSR Logistic Vehicle System Replacement UK United KingdomM-ATV MRAP All-Terrain Vehicle



March 5, 2015J.P. Morgan Transportation, Aviation & Industrials Conference 23

Appendix: Non-GAAP to GAAP Reconciliation

• The tables below present a reconciliation of the Company’s presented non-GAAP measures to the most directly comparable GAAP measures:

Three Months EndedMarch 31, 2014

Adjusted earnings per share - diluted (non-GAAP) 0.80$ Reduction of valuation allowance on net operating loss carryforward 0.14 Pension curtailment, net of tax (0.03) Debt extinguishment costs, net of tax (0.08) Earnings per share - diluted (GAAP) 0.83$

2014 2013

Adjusted earnings per share - diluted (non-GAAP) 0.41$ 0.63$ OPEB curtailment gain, net of tax 0.02 - Earnings per share - diluted (GAAP) 0.43$ 0.63$

Three Months EndedDecember 31,




• The table below presents a reconciliation of the Company’s presented non-GAAP measures to the most directly comparable GAAP measures:

2013 2014 2015E

Consolidated operating income margins (non-GAAP) 7.0% 7.5% 8.0%Union contract ratification costs -0.1% - - Pension curtailment and settlement loss - -0.1% - OPEB curtailment gain - 0.2% - Tender offer and proxy contest costs -0.2% - - Impairment charge -0.1% - - Contract pricing adjustment for OPEB costs - -0.2% - Consolidated operating income margins (GAAP) 6.6% 7.4% 8.0%

Fiscal Year EndedSeptember 30,




• The table below presents a reconciliation of the Company’s presented non-GAAP measures to the most directly comparable GAAP measures (in millions, except per share amounts):

Low High

Adjusted operating income (non-GAAP) 510.0$ 540.0$ OPEB curtailment gain 3.4 3.4Operating income (GAAP) 513.4$ 543.4$

Adjusted earnings per share - diluted (non-GAAP) 4.00$ 4.25$ OPEB curtailment gain, net of tax 0.02 0.02Debt extinguishment costs, net of tax (0.11) (0.11)Earnings per share - diluted (GAAP) 3.91$ 4.16$

Fiscal 2015Expectations

Net cash flows provided by operating activities 372.0$ Additions to property, plant and equipment (150.0) Net additions to equipment held for rental (22.0) Free cash flow 200.0$

Fiscal 2015 Expectations

oshkosh corp 3-5-15 jpm presentation final · j.p. morgan transportation, aviation &...

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